Tax-Sheltered Annuity 403(b) Program University of Wisconsin May 1, 2015

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1 Annual Report Tax-Sheltered Annuity 403(b) Program University of Wisconsin May 1, 2015 Office of Human Resources and Workforce Diversity University of Wisconsin System Administration 780 Regent St., Suite 224 Madison, WI 53715

2 UNIVERSITY OF WISCONSIN TAX-SHELTERED ANNUITY 403(b) PROGRAM ANNUAL REPORT EXECUTIVE SUMMARY In the stock market continued the strong performance seen over the last several years, though not quite as strong as in. The Standard & Poor s 500-stock index showed a gain of percent for. It was the third consecutive year that the market benchmark has risen by more than 10 percent. Other market measures also ended the year on a strong note. The Dow Jones Industrial Average closed up 7.52 percent for, while the Nasdaq composite index ended up 13.4 percent. In Wisconsin, however, the economic outlook has continued to be somewhat depressed. Most University of Wisconsin employees did not receive wage increases in and although the employee-required Wisconsin Retirement System (WRS) contributions decreased slightly, health insurance costs continued to increase. This continued lack of discretionary income makes participation in the UW TSA 403(b) Program difficult, especially for those in low-to-moderate income groups. In an effort to overcome this, we increased our outreach efforts significantly in, and just looking at those employees eligible to participate in the WRS participation in the TSA program rose slightly to 9,436 up from 9,357 in. Contributions to the TSA Program increased slightly in as well, to over $69.46 million an increase of a little more than $700,000. In, Roth after-tax contributions made up over $3.79 million, or 5.47% of the overall contributions, up from 3.97% in and 2.62% in There were approximately one million dollars of additional Roth deferrals in. With the improved markets in, accumulated assets in the UW TSA Program increased by approximately $52 million to $2.1 billion. In, TIAA-CREF received almost $29.7 million in contributions in our plan, over 42.7% of the total contributions. Fidelity received the next-largest amount of contributions, slightly more than $24 million or 34.8% of contributions. T. Rowe Price received almost $9.3 million in contributions or roughly 13.3%. The two insurance companies together received 8.6% of contributions, down from 9.1% in. Dreyfus received the fewest contributions, approximately.5% of the total. During this past year the TSA Review Committee and TSA Program staff concentrated on the following issues: Ensuring that the UW TSA 403(b) Plan is fully compliant with IRS 403(b) Regulations and that all deposits into participant accounts are accurate and are remitted timely. Making sure UW TSA participants have access to the lowest-cost share classes possible. In the number of Fidelity and TIAA-CREF funds with Institutional share classes was increased dramatically. In staff negotiated with T. Rowe Price to offer the institutional share class for two of the most popular T. Rowe Price funds in the UW line-up, Equity Income and Mid-Cap Growth. This change will be implemented in Institutional class shares of mutual funds generally have the same management team and investment objectives as the respective funds in other share classes the expense ratios are just lower. Having lower expense ratios typically means that returns may be higher. This is a great advantage for our participants. Evaluating performance of our participating investment companies and recommending steps to enhance the program. At the 2104 fall TSA Review Committee meeting, the committee voted to recommend that Dreyfus be discontinued as an investment option in the 403(b) program because of the low number of participants and administrative workload involved with Dreyfus participation in the plan. Carrying out major outreach initiatives at three UW campuses, in addition to the regular educational initiatives staff puts on and coordinates. TSA staff worked with UW-La Crosse, UW-Oshkosh, and UW-Stevens Point campus benefits staff, TSARC members, and TSA companies to schedule a full range of individual counseling sessions and workshops, create posters and other marketing materials advertising the events, and send letters to UW employees not participating in the TSA Program. Letters were sent to almost 3,000 employees. In there was increased participation at these campuses.

3 Meeting with all TSA investment companies each year to thoroughly review plan investment performance, customer service, educational opportunities for participants, expenses, and revenue generated by participant investments and negotiate with TSA companies to provide a revenue account for the benefit of our plan participants. Fidelity, TIAA-CREF, and T. Rowe Price provide the UW with administrative budgets to offset plan expenses. Suspending participant fees. With the introduction of revenue accounts beginning in 2012, the TSA Review Committee was able to reduce the participant fee in and, in, was able to eliminate it. This has removed one of the potential roadblocks to participating in the plan. The TSARC will continue to monitor the financial health of the TSA Program and make adjustments to the participant fee if ever needed. Education Program staff, company representatives, and TSARC members participated in campus presentations, as well as many benefits fairs. Earning statement messages to all employees, including most student hourlies, appeared twice during the year. UW TSA Program staff and benefits staff at the campuses organized TSA events and made arrangements for presentations by UW System staff and TSA companies. TSARC members Kevin Bahr, Bob Kunkel, Mike Stifter, and Rob Wolf made TSA presentations at their institutions. TSA workshops reached 411 employees. T. Rowe Price offered live and recorded webinars, a cost-effective means of providing participant education that was well received; these webinars reached 71 employees. TSA investment companies continued to offer very popular individual counseling sessions. In counseling was provided at all the UW institutions, reaching more than 4,000 employees. Combined outreach events reached over 4,482 employees. Contribution Patterns Slightly less than 27% of all permanent employees participated in the Program in. Although almost 32% of those between age 50 and 59 participate, those who begin to save for retirement too late may not be able to save enough to be adequately prepared. On average, participants contributed 10.2% of salary; however, there were differences among groups of contributors. Classified employees contributed 8.1% of salary, whereas unclassified staff contributed 10% on average. Asset Allocation The UW TSA Program offers a wide array of investment options. Most contributions go to a relatively small number of funds, but the variety ensures that employees are able to select the type of investment they want. In, the top ten funds accounted for over 32% of all contributions, and the top 50 funds for almost 66% of contributions. The top fund every year is the TIAA-CREF Traditional Fund that provides a guaranteed return of at least 3% every year; the number two spot every year goes to TIAA-CREF Stock fund. CREF Social Choice has come in third again this year, although contributions are down slightly. This year eighteen of the top 50 funds are Target Retirement Date funds, diversified investments that grow more conservative as the participant gets closer to retirement. In, TSA participants once again decreased the amount of contributions to large-cap funds. Large-cap stock funds attracted 25.89% of current contributions compared to 26.02% in and 25.47% in This is quite a shift from the pre-2008 levels: 34.44% in 2007, 34.71% in 2006, 38.36% in 2005, and 41.21% in Contributions to specialty or sector funds decreased slightly in. Real Estate funds continue to be the most popular specialty fund, but contributions to these funds went down from last year. Other popular sector funds include heath funds and natural resources funds. In, contributions to both fixed annuities and to money market funds together made up 14.58% of contributions a decrease from. Assets in these very conservative investments have decreased from as well and represent 23.3% of assets. Contributions to bond funds have decreased, accounting for 8.19% of contributions compared with 8.33% in and 9.3% in Target date funds, also referred to as lifecycle funds, have shown a steady increase in contributions over the years, with 22.74% of all contributions in versus19.82% of all contributions in.

4 2011- PLAN ASSETS AND ANNUAL CONTRIBUTIONS BY INVESTMENT COMPANY INSURANCE TOTAL ASSETS (Company Reported) Company Reported 2012 ANNUAL CONTRIBUTIONS (UW Pa Vendor Reported** RiverSource (IDS) $ 107,335, $ 111,370, $ 89,612, $ 87,448, $ 3,539, $ 3,589, $ 3,717, $ 3,818, $ 4,391, LINCOLN $ 139,734, $ 137,892, $ 126,406, $ 123,298, $ 2,442, $ 3,292, $ 2,557, $ 2,704, $ 4,643, TIAA-CREF $ 981,951, $ 977,439, $ 855,841, $ 780,424, $ 29,681, $ 29,934, $ 29,793, $ 29,833, $ 31,604, Sub- $ 1,229,022, $ 1,226,702, $ 1,071,859, $ 991,171, $ 35,663, $ 36,815, $ 36,068, $ 36,356, $ 40,639, WRS CORE* $ 13,875, $ 14,077, $ 13,554, $ 16,612, WRS VARIABLE* $ 2,375, $ 3,428, $ 3,908, $ 4,160, Sub- $ 16,250, $ 17,505, $ 17,463, $ 20,773, MUTUAL FUNDS DREYFUS $ 9,266, $ 9,297, $ 7,823, $ 6,528, $ 345, $ 375, $ 450, $ 445, $ 568, FIDELITY $ 618,217, $ 585,279, $ 453,616, $ 409,902, $ 24,184, $ 29,009, $ 23,094, $ 22,075, $ 23,337, T ROWE PRICE $ 218,567, $ 202,658, $ 167,125, $ 148,443, $ 9,269, $ 9,291, $ 9,143, $ 9,131, $ 9,838, Sub- $ 846,050, $ 797,234, $ 628,565, $ 564,875, $ 33,799, $ 38,676, $ 32,688, $ 31,651, $ 33,744, DWS (SCUDDER)* $ 3,938, $ 3,908, $ 3,500, $ 3,705, Sub- incl DWS $ 849,989, $ 801,143, $ 632,066, $ 568,581, TOTAL (w/o WRS & DWS) $ 2,075,073, $ 2,023,937, $ 1,700,425, $ 1,556,046, $ 69,463, $ 75,491, $ 68,757, $ 68,007, $ 74,384, TOTAL (incl WRS) $ 2,091,324, $ 2,041,442, $ 1,717,889, $ 1,576,820, TOTAL (incl WRS & DWS) $ 2,095,262, $ 2,045,350, $ 1,721,390, $ 1,580,526, ** 2011 UW Payroll records are not available because of conversion to a new payroll system in April 2011 Note: WRS and DWS (Scudder) are no longer investment options, but past records have been retained for comparison. * Asset balances are available for WRS and for DWS. Since those accounts are still in our plan, we have included them for reference. 1

5 Annual Contributions by Investment Company Type $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000, $0 Insurance TIAA-CREF Mutual Funds WRS Insurance $ 10,277, $ 9,735, $ 8,697, $ 8,063, $ 9,035, $ 6,522, $ 6,275, $ 5,981, TIAA-CREF $ 32,268, $ 32,029, $ 31,183, $ 31,594, $ 31,604, $ 29,833, $ 29,793, $ 29,681, Mutual Funds $ 33,189, $ 34,031, $ 32,372, $ 33,359, $ 33,744, $ 31,651, $ 32,688, $ 33,799, WRS $ 1,535, $ 1,564, $ - $ - $ - $ - $ 77,271, $ 77,360, $ 72,254, $ 73,018, $ 74,384, $ 68,007, $ 68,757, $ 69,463, Source: UW Payroll records; Vendor Reported, which may include rolled in moneys as well 2012 and after UW Payroll records from HRS 2

6 Contributions by Size of Deferral Participants by Size of Deferral 61.1% 1.2% 6.8% 6.6% 6.3% 7.0% 5.5% 5.5% <=$1000 $1001-$3000 $3001-$5000 $5001-$7000 $7001-$9000 $9001-$11,000 $11,001-$13,000 >$13, % 3.4% 4.0% 6.4% 8.0% 12.1% 16.0% 26.2% <=$1000 $1001-$3000 $3001-$5000 $5001-$7000 $7001-$9000 $9001-$11,000 $11,001-$13,000 >$13,000 Contributions Number of Contributors <=$1000 $ 911,336 $ 904,429 $ 897,404 $ 906, $ 815,535 $ 786,528 $ 825,272 1,545 1,559 1,564 1,603 1,456 1, $1001-$3000 $ 6,183,314 $ 6,250,418 $ 5,912,362 $ 5,696, $ 5,003,135 $ 4,835,376 $ 4,741,936 3,202 3,210 3,068 2,947 2,598 2, $3001-$5000 $ 6,245,585 $ 6,133,050 $ 5,530,653 $ 5,437, $ 4,701,697 $ 4,565,137 $ 4,581,686 1,553 1,515 1,370 1,343 1,168 1, $5001-$7000 $ 6,224,667 $ 6,159,888 $ 5,457,358 $ 5,559, $ 4,656,706 $ 4,473,578 $ 4,401,518 1,049 1, $7001-$9000 $ 5,896,138 $ 6,094,993 $ 5,597,386 $ 5,280, $ 4,626,075 $ 4,660,459 $ 4,842, $9001-$11,000 $ 5,433,385 $ 5,505,237 $ 4,886,478 $ 4,898, $ 4,181,472 $ 3,924,070 $ 3,809, $11,001-$13,000 $ 6,203,835 $ 5,345,401 $ 5,041,101 $ 4,761, $ 3,938,512 $ 4,196,365 $ 3,840, >$13,000 $ 40,173,242 $ 40,967,283 $ 38,931,402 $ 40,476, $ 40,084,688 $ 41,315,520 $ 42,418,748 2,291 2,345 2,161 2,231 2,148 2, $13,001-$15,000 $ 8,394,412 $ 6,580,643 $ 6,395, $15,001-$17,000 $ 9,462,812 $ 9,585,290 $ 10,431, >$17,000 $ 23,110,059 $ 22,765,468 $ 23,650, ,151 1,102 1,135 $17,001-$19,000 $ 3,318, $19,001-$21,000 $ 7,226, $21,001-$22,000 $ 11,978, >$22,000 $ 1,127, $ 77,271,501 $ 77,360,700 $ 72,254,143 $ 73,018,127 $ 68,007,820 $ 68,757,031 $ 69,463,086 11,420 11,412 10,681 10,596 9,477 9,318 9,382 Average $ 6,766 $ 6,779 $ 6,765 $ 6,891 $ 7,176 $ 7,379 $ 7,404 Median $ 4,200 $ 4,200 $ 4,000 $ 4,143 $ 4,000 $ 4,100 $ 4, records not available because of conversion to new payroll system 3

7 80% 70% 60% 50% 40% 30% 20% 10% 0% TSA Participation by Employee Type Classified Protective Unclassified Exec No WRS N % 33.52% 42.49% 61.54% 0.76% 23.55% 50, % 32.97% 41.02% 65.70% 0.65% 23.21% 50, % 31.32% 40.54% 71.43% 0.69% 22.95% 50, % 32.12% 40.74% 70.97% 0.73% 22.96% 51, % 34.55% 40.00% 70.97% 0.75% 22.49% 50, % 32.46% 39.14% 70.97% 0.73% 22.67% 50, % 34.48% 38.14% 66.67% 0.77% 23.30% 48, % 31.86% 35.85% 57.89% 0.81% 21.81% 48, % 30.48% 34.88% 60.00% 1.00% 21.28% 49, % 26.43% 34.21% 54.29% 1.09% 27.37% 56, % 24.27% 32.18% 48.28% 1.16% 17.42% 54, % 25.11% 31.41% 52.78% 1.00% 17.17% 54, % 26.01% 31.04% 60.00% 1.03% 17.23% 54,750 Participation of those with WRS 26.72% Source: UW Payroll records 2011 includes only the period from 4-29 through Please note: those not eligible for WRS include short-term academic staff, rehired annuitants, graduate assistants and others not likely to participate in the 403(b) plan. 4

8 25% 20% 15% 10% 5% 0% Percent of Salary Deferred Classified Protective Unclassified Exec No WRS All Employees % 7.83% 9.30% 6.09% 18.71% 9.26% % 7.23% 9.52% 7.08% 22.11% 9.39% % 8.08% 10.07% 8.33% 23.09% 9.93% % 7.97% 10.50% 8.38% 21.98% 10.30% % 7.47% 10.97% 8.30% 22.99% 10.64% % 7.42% 11.07% 8.06% 22.11% 10.72% % 6.86% 10.58% 7.39% 23.52% 10.25% % 7.05% 10.49% 7.70% 20.28% 10.14% % 6.43% 10.77% 7.96% 21.22% 10.39% % 5.90% 10.40% 8.10% 18.90% 10.38% % 5.20% 10.10% 7.60% 20.10% 10.20% 8.20% 5.40% 10.20% 8.70% 19.60% 10.42% 8.10% 4.60% 10.00% 7.40% 19.30% 10.22% Source: UW Payroll records 2011 figures only from 4/29-12/32 5

9 UW TSA Program Participation by Unit and Age < All WRS Employees Percent Percent 2012 Percent 2011 Percent Madison ,271 1, ,768 4,720 4,742 5, % 28.94% 28.94% 32.09% Milwaukee ,013 1, % 25.32% 25.55% 29.70% Eau Claire % 30.73% 30.93% 36.18% Green Bay % 24.54% 24.63% 30.45% La Crosse % 25.94% 27.52% 30.91% Oshkosh % 23.04% 23.12% 28.01% Parkside % 25.04% 23.24% 26.67% Platteville % 19.20% 19.65% 25.05% River Falls % 24.65% 24.20% 27.98% Stevens Point % 27.30% 28.12% 31.21% Stout % 18.52% 18.98% 21.39% Superior % 24.61% 24.61% 32.31% Whitewater % 26.80% 27.26% 32.10% Colleges % 19.69% 19.44% 21.51% Extension % 28.98% 29.36% 32.46% System % 48.48% 48.48% 53.60% System-wide % 35.19% 64.41% 41.74% ,423 2,469 3,380 1, ,436 9,357 9,477 10,461 35, % 26.87% 27.08% 30.63% Note: 2011 figures do not include participation from 1/1-4/29 due to conversion to new payroll system Participation Age < Participants ,388 2,491 3,436 1, Participants ,423 2,469 3,380 1, ,436 9,357 9,477 10,461 10,596 10,549 11,282 11,211 All WRS Employees * 2,446 6,884 8,775 10,678 5, ,047 34,826 33,970 34,148 34,148 33,474 34,000 32,965 Percent # not 11.86% 20.67% 28.14% 31.65% 31.39% 27.46% 10.34% 26.92% 26.87% 27.90% 30.63% 31.03% 31.51% 33.18% 34.01% available 6

10 PARTICIPANT CHARACTERISTICS NUMBER Unclassified Executives Classified Protectives No WRS TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp ,309 20, ,158 12, ,642 11,671 50, ,407 20, ,102 12, ,861 11,724 51, ,308 20, ,904 12, ,504 11,432 50, ,213 20, ,998 12, ,023 11,420 50, ,202 21, ,988 12, ,857 11,412 48, ,751 21, ,711 12, ,754 10,681 48, ,673 22, ,680 12, ,190 10,596 49, ,536 22, ,627 12, ,803 10,480 56, ,968 21, ,223 12, ,517 9,492 54,487 6,934 22, ,157 11, ,262 9,370 54,569 6,972 22, ,171 11, ,223 9,433 54,750 NOTE: 2011 figures do not include 1/1-4/29 information because of conversion to HRS payroll system AVERAGE SALARY Unclassified Executives Classified Protectives No WRS TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp $ 66,835 $ 52,121 $ 163,099 $ 161,202 $ 38,932 $ 29,067 $ 54,625 $ 45,829 $ 16,271 $ 4,602 $ 59,009 $ 29, $ 67,454 $ 52,914 $ 174,528 $ 168,629 $ 39,079 $ 30,141 $ 56,195 $ 44,175 $ 19,511 $ 4,785 $ 59,501 $ 32, $ 69,053 $ 53,879 $ 174,919 $ 178,377 $ 41,735 $ 31,743 $ 60,699 $ 47,862 $ 20,292 $ 4,174 $ 61,520 $ 32, $ 70,820 $ 55,359 $ 191,384 $ 188,095 $ 42,977 $ 33,093 $ 64,527 $ 50,621 $ 18,936 $ 4,418 $ 63,120 $ 33, $ 73,788 $ 57,314 $ 185,140 $ 176,603 $ 46,440 $ 35,729 $ 68,105 $ 54,040 $ 20,314 $ 4,763 $ 66,261 $ 35, $ 74,556 $ 57,655 $ 196,124 $ 175,348 $ 46,318 $ 35,713 $ 68,193 $ 53,893 $ 22,240 $ 5,023 $ 67,004 $ 36, $ 74,486 $ 56,980 $ 183,512 $ 184,355 $ 46,139 $ 35,356 $ 65,587 $ 52,495 $ 18,988 $ 5,210 $ 66,858 $ 35, $ 76,177 $ 58,842 $ 191,811 $ 190,717 $ 46,685 $ 35,910 $ 64,997 $ 52,094 $ 33,841 $ 11, $ 80,060 $ 61,386 $ 217,402 $ 214,041 $ 48,844 $ 36,859 $ 70,942 $ 57,223 $ 41,175 $ 12,432 $ 82,015 $ 62,359 $ 202,254 $ 205,445 $ 49,703 $ 37,630 $ 73,923 $ 57,656 $ 38,803 $ 12,307 $ 73,089 $ 36,684 $ 84,232 $ 64,148 $ 217,016 $ 204,047 $ 50,609 $ 39,048 $ 75,561 $ 61,639 $ 35,080 $ 12,445 $ 75,177 $37,404 AVERAGE AGE Unclassified Executives Classified Protectives No WRS TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp

11 Allocation of Contributions and Assets Contributions Money Market 3.17% Fixed Annuities, 11.41% Bonds 8.19% Large-cap, 25.89% Mid-cap, 5.08% Balanced, 30.24% Small-cap, 2.64% Specialties, 5.42% International, 7.96% Contr. Contr. Assets Assets Large-cap Value $ 1,989, $ 2,393, $ 62,210, $ 65,001, Large-cap Blend $ 10,837, $ 12,293, $ 390,732, $ 376,929, Large-cap Growth $ 6,714, $ 7,642, $ 251,382, $ 252,714, % 26.02% 33.94% 34.32% Mid-cap Value $ 1,412, $ 1,553, $ 47,722, $ 42,619, Mid-cap Blend $ 1,207, $ 1,393, $ 37,788, $ 38,183, Mid-cap Growth $ 1,216, $ 1,330, $ 30,942, $ 31,646, % 4.98% 5.61% 5.56% Small-cap Value $ 471, $ 495, $ 14,766, $ 15,478, Small-cap Blend $ 1,079, $ 1,200, $ 22,828, $ 23,676, Small-cap Growth $ 439, $ 523, $ 15,676, $ 17,119, % 2.59% 2.57% 2.78% Europe Stock $ 140, $ 147, $ 3,039, $ 3,780, Latin Amer. Stock $ 112, $ 147, $ 1,692, $ 2,311, Divers. Emerge. Mkts $ 850, $ 563, $ 18,926, $ 8,712, Divers. Pacific Stock $ 32, $ 49, $ 1,250, $ 1,236, Pacific ex-japan Stock $ 192, $ 229, $ 4,637, $ 4,734, Japan Stock $ 22, $ 30, $ 629, $ 811, Foreign Stock $ 3,106, $ 3,428, $ 66,351, $ 70,435, World Stock $ 1,555, $ 1,881, $ 50,423, $ 52,201, % 7.55% 7.08% 7.13% 8

12 Allocation of Contributions and Assets, cont. Contr. Contr. Assets Assets Conservative Allocation $ 270, $ 306, $ 7,439, $ 8,003, Moderate Allocation $ 5,243, $ 6,195, $ 137,156, $ 131,411, Target Retirement Date $ 17,169, $ 17,017, $ 153,000, $ 138,172, Convertible Bond $ 18, $ 21, $ 1,773, $ 1,742, World Allocation $ 126, $ 92, $ 4,581, $ 3,151, % 27.54% 14.65% 13.96% Long Government $ 100, $ 79, $ 1,318, $ 1,129, Intermediate Govt $ 465, $ 566, $ 11,229, $ 10,331, Short Government $ 129, $ 87, $ 1,647, $ 1,698, Long-Term Bond $ 10, $ 12, $ 360, $ 192, Intermediate-Term Bond $ 2,722, $ 3,278, $ 65,041, $ 62,470, Short-Term Bond $ 261, $ 225, $ 5,449, $ 5,133, Ultrashort Bond $ 11, $ 5, $ 388, $ 371, Inflation Protected Bond $ 806, $ 1,211, $ 18,309, $ 19,683, High-Yield Bond $ 721, $ 555, $ 13,415, $ 12,559, Multisector Bond $ 516, $ 628, $ 12,832, $ 14,184, International Bond $ 5, $ 3, $ 86, $ 98, Emerging Mkt Bond $ 181, $ 257, $ 2,832, $ 2,972, World Bond $ 135, $ 133, $ 2,858, $ 2,425, Bank Loan $ 116, $ 102, $ 3,942, $ 3,706, % 8.33% 6.73% 6.77% Special.-Communications $ 146, $ 152, $ 3,605, $ 3,683, Special.-Financial $ 83, $ 95, $ 2,612, $ 2,788, Special.-Health $ 963, $ 810, $ 31,701, $ 22,700, Special.-Nat. Resources $ 535, $ 601, $ 10,943, $ 12,361, Special.-Prec. Metals $ 79, $ 133, $ 1,234, $ 1,468, Special.-Real Estate $ 1,746, $ 2,450, $ 51,515, $ 42,928, Special.-Technology $ 411, $ 391, $ 19,447, $ 16,536, Special.-Utilities $ 124, $ 165, $ 5,206, $ 4,779, % 5.59% 6.08% 5.30% Money Market $ 2,389, $ 2,535, $ 42,802, $ 43,829, % 2.95% 2.06% 2.17% Fixed Annuities $ 8,613, $ 12,406, $ 441,344, $ 445,827, % 14.46% 21.27% 22.03% $ 75,491, $ 85,827, $ 2,075,073, $ 2,023,937, Source: Investment company reporting 9

13 50 Most-Used Funds Based on Contributions Company Fund Name Ticker Fund Type Contributions Assets 1 TIAA-CREF TIAA Traditional Annuity Fixed $ 7,439, $ 378,803, TIAA-CREF CREF Stock Large Blend $ 4,215, $ 218,228, TIAA-CREF CREF Social Choice Moderate Allocation $ 1,990, $ 53,514, Fidelity Fidelity Contrafund - Class K FCNKX Large Growth $ 1,838, $ 73,824, Fidelity Fidelity Freedom K 2025 Fund K Shares FKTWX Target date $ 1,703, $ 12,001, Fidelity Fidelity Freedom K 2030 Fund K Shares FFKEX Target Date $ 1,685, $ 9,724, Fidelity Fidelity Freedom K 2020 Fund K Shares FFKDX Target Date $ 1,505, $ 17,716, FidelitySpartan Spartan 500 Index Fund - Institutional Cl. FXSIX Large Blend $ 1,442, $ 29,804, TIAA-CREF CREF Growth Large Growth $ 1,372, $ 51,243, TIAA-CREF TIAA Real Estate Specialty-Real Estate $ 1,273, $ 39,919, TIAA-CREF CREF Equity Index Large Blend $ 1,216, $ 42,475, TIAA-CREF CREF Global Equities World Stock $ 1,195, $ 42,142, TIAA-CREF Lifecycle Fund Institutional Share TCWIX Target Date $ 1,039, $ 9,407, Fidelity Fidelity Freedom K 2040 Fund K Shares FFKFX Target date $ 1,036, $ 8,139, TIAA-CREF CREF Bond Intermediate-Term Bond $ 982, $ 24,526, Lincoln Fixed account Fixed $ 951, $ 50,070, TIAA-CREF Lifecycle Fund Institutional Share TCIIX Target Date $ 947, $ 6,364, TIAA-CREF Lifecycle Fund Institutional Share TCYIX Target Date $ 922, $ 7,656, Fidelity Fidelity Freedom K 2035 Fund K Shares FKTHX Target date $ 856, $ 7,835, TIAA-CREF Lifecycle Fund Institutional Share TCRIX Target Date $ 809, $ 6,400, Fidelity Fidelity Freedom K 2045 Fund K Shares FFKGX Target date $ 769, $ 3,480, Spartan Market Index Fund - 22 FidelitySpartan Institutional Class FSKTX Large Blend $ 730, $ 12,822, Fidelity Fidelity Low-Priced Stock Fund - Class K FLPKX Mid-Cap Blend $ 726, $ 27,295, TIAA-CREF Lifecycle Fund Institutional Share TCOIX Target Date $ 697, $ 4,814, TRowePrice T Rowe Price Capital Appreciation Fund PRWCX Moderate Allocation $ 684, $ 16,214, TIAA-CREF CREF Inflation-linked Bond Inflation Protected Bond $ 639, $ 14,281, TRowePrice T Rowe Price Retirement 2030 Fund TRRCX Target Date $ 620, $ 5,348, Fidelity Fidelity Money Market Fund SPRXX Money Market $ 590, $ 2,573, Spartan U.S. Bond Index Fund - Institutional 29 FidelitySpartan Class FXSTX Intermediate-Term Bond $ 572, $ 10,274, Fidelity Fidelity Balanced Fund - Class K FBAKX Moderate Allocation $ 560, $ 15,611, Ameriprise Variable Portfolio - Moderate Portfolio Moderate Allocation $ 555, $ 10,003, TIAA-CREF International Equity Index - Institutional Sh. TCIEX Foreign Large Blend $ 549, $ 8,924, TIAA-CREF Lifecycle Fund Institutional Share TCNIX Target Date $ 512, $ 7,378, Fidelity Fidelity Blue Chip Growth Fund - Class K FBGKX Large Growth $ 496, $ 16,685, TRowePrice T Rowe Price Retirement 2020 Fund TRRBX Target Date $ 477, $ 7,577, TIAA-CREF S&P 500 Index - Institutional Share TISPX Large Blend $ 462, $ 6,831, FidelitySelect Fidelity Select Biotechnology Portfolio FBIOX Specialty-Health $ 446, $ 10,854, Fidelity Fidelity Diversified International - Class K FDIKX Foreign Large Blend $ 437, $ 9,588, TRowePrice T Rowe Price Mid-Cap Growth Fund RPMGX Mid-Cap Growth $ 431, $ 12,510, Fidelity Fidelity Growth Company Fund - Class K FGCKX Large Growth $ 420, $ 15,691, TRowePrice T Rowe Price Equity Income Fund PRFDX Large Value $ 415, $ 14,458, Fidelity Freedom Index 2025 Fund - Class 42 Fidelity W (available 7/28/14) FQIFX Target Date $ 412, $ 923, Fidelity Fidelity Freedom K 2050 Fund K Shares FFKHX Target date $ 409, $ 1,502, TIAA-CREF Mid Cap Value - Institutional Share TIMVX Mid-Cap Value $ 404, $ 9,667, Fidelity Fidelity Cash Reserves FDRXX Money Market $ 375, $ 9,483, TRowePrice T Rowe Price Retirement 2025 Fund TRRHX Target Date $ 366, $ 5,244, TIAA-CREF Social Choice Equity - Institutional Share TISCX Large Blend $ 346, $ 4,332, TIAA-CREF Growth and Income Fund - Institutional Sh TIGRX Large Blend $ 346, $ 5,987, TIAA-CREF CREF Money Market Money Market $ 339, $ 5,736, TRowePrice T Rowe Price Retirement 2040 Fund TRRDX Target Date $ 336, $ 3,158, of Top 50 Funds $ 49,559, $ 1,369,062,

14 50 Most-Used Funds Based on Contributions Company Fund Name Ticker Fund Type Contributions Assets 1 TIAA-CREF TIAA Traditional Annuity Fixed $ 11,313, $ 384,887, TIAA-CREF CREF Stock Large Blend $ 5,371, $ 222,165, TIAA-CREF CREF Social Choice Moderate Allocation $ 2,956, $ 53,450, TIAA-CREF Lifecycle Fund Institutional Share TCYIX Target Date $ 2,028, $ 6,641, TIAA-CREF TIAA Real Estate Specialty-Real Estate $ 2,004, $ 34,274, Fidelity Fidelity Contrafund - Class K FCNKX Large Growth $ 1,932, $ 72,194, TIAA-CREF CREF Growth Large Growth $ 1,779, $ 46,307, TIAA-CREF CREF Equity Index Large Blend $ 1,777, $ 41,002, TIAA-CREF CREF Global Equities World Stock $ 1,562, $ 44,102, TIAA-CREF CREF Bond Intermediate-Term Bd $ 1,447, $ 25,468, Fidelity Fidelity Freedom K 2035 Fund K Shares FKTHX Target Date $ 1,291, $ 6,709, Fidelity Fidelity Freedom K 2025 Fund K Shares FKTWX Target Date $ 1,244, $ 9,770, Fidelity Fidelity Freedom K 2030 Fund K Shares FFKEX Target date $ 1,200, $ 8,443, Fidelity Fidelity Freedom K 2020 Fund K Shares FFKDX Target date $ 1,158, $ 15,023, FidelitySpartan Spartan 500 Index Fund - Institutional FXSIX Large Blend $ 1,129, $ 22,589, TIAA-CREF Lifecycle Fund Institutional Share TCRIX Target Date $ 1,100, $ 6,437, TIAA-CREF Lifecycle Fund Institutional Share TCWIX Target Date $ 1,072, $ 8,918, Fidelity Fidelity Freedom K 2040 Fund K Shares FFKFX Target date $ 1,029, $ 6,792, TIAA-CREF Lifecycle Fund Institutional Share TCIIX Target Date $ 1,012, $ 5,929, TIAA-CREF CREF Inflation-linked Bond Inflation Protected Bond $ 975, $ 15,273, Fidelity Fidelity Low-Priced Stock Fund - Class K FLPKX Mid-Cap Blend $ 932, $ 28,312, Lincoln Fixed Account General Account $ 814, $ 49,573, Fidelity Fidelity Balanced Fund - Class K FBAKX Moderate Allocation $ 796, $ 14,101, Fidelity Fidelity Freedom K 2045 Fund K Shares FFKGX Target date $ 734, $ 2,842, TIAA-CREF CREF Money Market Money Market $ 722, $ 5,626, FidelitySpartan Spartan U.S. Bond Index Fd - Inst Cl FXSTX Intermediate-Term Bond $ 698, $ 8,973, TIAA-CREF Lifecycle Fund Institutional Share TCOIX Target Date $ 687, $ 4,776, TIAA-CREF International Equity Index - Institutional TCIEX Foreign Large Blend $ 673, $ 10,251, TRowePrice T Rowe Price Capital Appreciation Fund PRWCX Moderate Allocation $ 644, $ 14,174, Ameriprise Variable Portfolio - Moderate Portfolio Moderate Allocation $ 561, $ 14,152, TIAA-CREF Growth and Income Fund - Institutional TIGRX Large Blend $ 554, $ 5,539, FidelitySpartan Spartan Market Index Fd - Inst. Cl FSKTX Large Blend $ 549, $ 10,890, TRowePrice T Rowe Price Retirement 2030 Fund TRRCX Target Date $ 536, $ 4,733, TRowePrice T Rowe Price Retirement 2020 Fund TRRBX Target Date $ 526, $ 7,260, Fidelity Fidelity Cash Reserves FDRXX Money Market $ 515, $ 9,658, Fidelity Fidelity Diversified International Fd - Cl K FDIKX Foreign Large Blend $ 514, $ 10,229, TIAA-CREF Lifecycle Fund Institutional Share TCNIX Target Date $ 494, $ 7,179, TRowePrice T Rowe Price Mid-Cap Growth Fund RPMGX Mid-Cap Growth $ 477, $ 11,683, TRowePrice T Rowe Price Equity Income Fund PRFDX Large Value $ 477, $ 14,034, TIAA-CREF Mid Cap Value - Institutional Share TIMVX Mid-Cap Value $ 475, $ 8,774, Fidelity Fidelity Blue Chip Growth Fund - Cl. K FBGKX Large Growth $ 470, $ 14,948, Fidelity Fidelity Freedom K 2015 Fund K Shares FKVFX Target date $ 453, $ 8,131, Fidelity Fidelity Growth Company Fund - Cl. K FGCKX Large Growth $ 420, $ 13,550, Fidelity Fidelity Growth Company Fund - Cl. K FDGRX Large Growth $ 420, $ 13,550, Fidelity Fidelity Strategic Income Fund FSICX Multisector Bond $ 388, $ 7,197, Fidelity Fidelity International Discovery Fd - Cl K FIDKX Foreign Large Blend $ 382, $ 4,731, Fidelity Fidelity Small Cap Discovery Fund (formerly Fidelity Small Cap Retire Fund) FSCRX Small Blend $ 381, $ 5,359, TIAA-CREF S&P 500 Index - Institutional Share TISPX Large Blend $ 366, $ 4,749, TRowePrice T Rowe Price Retirement 2025 Fund TRRHX Target Date $ 355, $ 4,039, TIAA-CREF Large Cap Value Index - Institutional TILVX Large Value $ 341, $ 4,459, of Top 50 Funds $ 59,757, $ 1,359,871,

15 Educational Initiatives In TSA Program staff continued to promote education efforts by providing support and resources for benefits staff at our institutions, working with our investment companies, updating our written informational pieces, and making information available to employees on our website. Achievements include the following: Encouraging investment company participation in educational efforts. Individual counseling sessions continued to be popular. In TIAA-CREF held 632one-on-one counseling sessions; Fidelity held 482; Lincoln held 722 and Ameriprise (RiverSource) held 2,018. Dreyfus counseled at least 11 participants via phone, and T. Rowe Price counseled 7 employees at one-on-one counseling sessions; phone sessions were not tracked. In investment companies reached approximately 4,000 employees. Facilitating TSA investment companies participation in campus benefits fairs: Fidelity and TIAA-CREF had representatives at all 13 benefits fairs at 4-year campuses; T. Rowe Price at 12. Ameriprise and Lincoln attended 7. Facilitating Fidelity s Building a Portfolio for Any Weather workshop at the UW-Madison benefits fair. Lincoln presented Understanding Your Investment Instincts to Better Overcome Market Mistakes at the Milwaukee benefits fair; TIAA-CREF presented Tomorrow in Focus: Saving for Your Ideal Retirement at the Oshkosh benefits fair. TIAA-CREF, Fidelity and T. Rowe Price participated in the April UW-Stout wellness fair; Fidelity presented Guidance and Strategies to Make Better Investment Decisions, and T. Rowe Price presented Retirement Saving Options/Tax-Deferred or After-Tax (Roth). Coordinating the spring outreach campaigns at La Crosse, Oshkosh, and Stevens Point. A letter was sent to home addresses of employees without a TSA deduction, encouraging them to save for their future retirement. Enclosed were a flyer of TSA events, the Quick Guide to the TSA Program, and a Salary Reduction Agreement. Facilitating the T. Rowe Price live webinars, Retirement Investing from Beginning to End in April and Roth Contributions in November, with a total of 45 employees participating. Recorded webinars Retirement Investing from Beginning to End, Roth Contributions and Financial Priorities for Women were viewed by 26 employees. Other recorded T. Rowe Price webinars for its educational institution clients were also made available to UW employees. Coordinating TSA messages on earning statements. Student hourlies and classified employees received a message on their March 20 and November 13 paychecks. Unclassified employees received a message on their April 1 and December 1 paychecks. A link takes employees directly to the TSA website. Creating Fidelity and T. Rowe Price quick enrollment cards. Posting articles No Tax-Sheltered Annuity Participant Fee in, Save for Your Future with the TSA 403(b) Program, It s Easy to Invest in the TSA 403(b) Program and 2015 TSA Limits Announced on the employee portal. Compiling June 30 and December 31 TSA company Investment Returns and Selected Returns. The Investment Returns and Selected Returns are provided to the campus TSA Coordinators for dissemination to employees. Creating webpages for the TSA Program on the new Office of Human Resources and Workforce Diversity website. Updating resources available on our website including current contribution limits, fund returns, the Schedule of Individual Counseling Sessions, the Salary Reduction Agreement, the revised Selected Returns, Question and Answer Guide and Quick Guide to the TSA Program, TSA Review Committee Meeting minutes, and the Annual Report. Presenting workshops for UW employees and families at UW institutions. Date Location Attendance January 22 Madison 18 January 29 Green Bay 10 February 11 Madison 5 March 3 Madison 21 March 24 and 25 River Falls Mike Stifter and Eric Sterner 10 April 3 Madison 12 April 7 Oshkosh Bob Kunkel and Tim Danielson 10 April 17 La Crosse Rob Wolf and Cedric Steine 21 April 22 Stevens Point Kevin Bahr and Julie Hayes 22 April 29 Colleges Dianne Saari and Terry Lauber Retirement Blackboard Collaborate 143 May 6 Madison 19 June 9 Madison 14 July 22 Madison 18 August 13 Madison 18 September 10 Madison 19 October 13 Madison 15 November 11 Madison 17 December 10 Madison Warm thanks to TSA coordinators at UW institutions who made presentations, organized TSA events, and made arrangements for the presentations by investment companies and System staff. The Program is greatly enhanced by their work. 12